Government offers property tax relief to small businesses, non-profits and arts and culture orgs
Credit to Author: Gordon McIntyre| Date: Tue, 25 Feb 2020 01:40:17 +0000
For two years, Corey Lapell, owner of CrossFit Empower in Kits, didn’t give himself a paycheque because of skyrocketing rent and property taxes, costs he did not wish to pass on to his customers.
Instead, he worked 80-hour weeks, showing up at the Fourth and Alma gym from 4 a.m. to 1 p.m., heading home for to spend three or four hours with his family, then back to CrossFit Empower from 5 o’clock onward.
Only in January did he begin giving himself a salary again, $1,000 a month.
“For us, we got hit with a property tax in January (for the previous year) of $4,000,” Lapell said. “That’s 40 per cent of one month’s rent. … For a small business, that’s not an insignificant hit.”
On Monday, the provincial government announced it will introduce interim legislation that would allow municipalities to exempt a portion of the assessed value of a property from taxation for small businesses, arts and culture organizations, and non-profits.
The legislation will allow municipalities to tailor relief to properties where taxes have spiked because of increasing land value, the Ministry of Municipal Affairs and Housing said. Municipalities have until April 22 to change their bylaws.
The announcement did not impress Vancouver’s mayor.
“This fails to provide tax relief for small business and non-profits, and it could wind up costing them even more,” Kennedy Stewart said. “We need to be able to target development potential and air space, and this does not allow us to tackle skyrocketing property values. These changes won’t do that.
“What we’d really like is for the province to drop these proposals and work with us on what we’ve proposed. Small businesses and arts organizations are so stressed.”
The provincial legislation targets Class 5 (light industry) and Class 6 (business and other) properties. But it does not address what is referred to as triple net leases in which the tenant pays the property tax nor does it address the issue of commercial property being taxed based on the unbuilt potential value of the air above it (should a one-storey business be turned into, say, a condo tower one day).
The ministry said on Monday there was not enough time to address those issues for 2020, but Stewart disagreed.
“We started talking about this (with the province) in late 2018, there has been time,” he said. “What scares me is how many businesses will go down before we get this fixed.”
There were those who spoke in favour of Monday’s announcement.
Michael Hind, CEO of the Tri-Cities Chamber of Commerce said the proposed interim measures are a step in the right direction, but stressed the need for the province to develop a comprehensive long-term solution.
And Brian McBay, executive director of 221A (a non-profit artist-run centre) and chairman of the city of Vancouver’s advisory committee on arts and cultural spaces, agreed the proposed legislation is a positive first step. According to the city, 20 cultural spaces with about 400 artists were closed in 2019.
“Vancouver is being emptied out of music and performing art venues, art galleries and artist studios,” he said in a statement. “The cultural sector is in crisis.”
A recent city of Vancouver study of six neighbourhoods found storefront vacancy rates had increased as much as five-fold. For examples, vacancies along South Granville rose to 11 per cent in 2019 from two per cent in 2006. Overall, the proportion of independent businesses decreased in five of the six neighbourhoods over that span.
Muriel Protzer, policy analyst for B.C. and Alberta with the Canadian Federation of Independent Business, said Monday’s announcement passes the issue back to municipalities “like a hot potato.”
“It’s not really a tool that is useful or that would actually provide meaningful relief,” she said. “Unfortunately when you look at main streets across Metro Vancouver and even Victoria you see empty storefronts boarded up. We don’t see this being a solution to help small businesses not close their doors.